Georgia tobacco gets surprise bump

• Georgia farmers recently finished planting what is expected to total 14,000 acres of tobacco, 2,000 acres more than last year.
• The bump in acreage is a surprise.

By Brad Haire, University of Georgia | May 13, 2011

For many years, Georgia’s tobacco industry has been declining. And this year looked to be its lowest point. But demand for U.S. tobacco in Asia has given Georgia tobacco farmers what could be a much-needed lift.

Georgia farmers recently finished planting what is expected to total 14,000 acres of tobacco, 2,000 acres more than last year, said J. Michael Moore, a tobacco agronomist with the University of Georgia College of Agricultural and Environmental Sciences.

The bump in acreage is a surprise, he said, considering Phillip Morris USA, a major buyer, decided to stop doing business with Georgia tobacco farmers last year, allowing contracts to expire. Several other companies had already cut contracts before last year.

Because of this, farmers were expected to plant closer to 9,000 acres of tobacco in Georgia this year, he said. This would have been the lowest acreage in Georgia since 1918, when farmers grew 7,000 acres, according to Georgia Agricultural Statistics Service records.

Slow to get contracts out

U.S. Growers Direct was slow to get contracts out, and many weren’t approved until February. Georgia and Florida growers, Moore said, are slated to supply as much as 15 million pounds of tobacco to the new company.

“Growers were very much ready to use their barns, equipment, land and know-how and jumped on the contracts,” he said.

Also, Georgia tobacco farmers recently petitioned Phillip Morris USA to once again do business with them, Moore said. The company agreed, but it will pay Georgia tobacco growers 10 cents less per pound than other growers they do business with.

Moore was surprised to see a heavy response by Georgia growers to this offer and many signed up for one-year contracts to deliver tobacco to Phillip Morris USA in Moultrie, Ga., later this year.

“All of this together has created some hope with growers, and they look to increase their production beyond last year,” Moore said.

Starting in the late 1960s, tobacco was big business in Georgia, worth well over $100 million annually. It reached its zenith in 1996 with a farm value of $206 million. It was worth $47 million in 2009.

Moore estimates only 225 farmers now grow tobacco in Georgia. In 2004, there were 1,000 Georgia tobacco farmers. That same year, the federal government ended its Depression-era tobacco quota program at the growers' request. It provided price support but restricted how much they could grow and where. Growers and quota owners were compensated for the end of the program, which started the tobacco decline in Georgia. Farmers now grow as much tobacco as they need to fill contracts they can get.